Investor Activity in the Housing Market: Trends and Insights for 2024

Author

Aidan Belew

Date Published

The real estate market in 2024 has brought a mix of challenges and opportunities for investors navigating shifting dynamics. According to the Realtor.com Investor Report (July 2024), investors like you continue to play a pivotal role, adapting strategies to meet the demands of an evolving housing market. At okood, we already know and champion the important role small investors play, who are increasingly making their mark by focusing on niche markets. Unlike institutional investors who target large, stable markets, smaller investors excel by leveraging deep local knowledge and relationships, carving out opportunities in areas where their expertise shines. This trend underscores the value of strategic focus and adaptability in today’s competitive landscape.

Investor Activity Reaches Record Share

"The growing presence of small investors is changing the landscape, especially as more of them rely on financing rather than cash purchases," a recent report from realtor.com stated. This trend aligns with a broader shift in investor behavior, as larger entities scale back and smaller players seize opportunities. With that, we at okood admire this trend as we are all about the small investor. Small investors accounted for 62.6% of investor purchases in Q1 2024, marking the highest share since data tracking began in 2001. While large and medium investors reduced their activity, small investors increased their acquisitions by 6.4% year-over-year. 

According to the report, In the first quarter of 2024, investors represented 14.8% of home purchases—the highest percentage on record. However, the total number of investor transactions declined slightly year-over-year, reaching its lowest level since 2020. Despite this dip, investor activity remained 10.6% higher than pre-pandemic levels from Q1 2019.

"Even with fewer transactions, investors are still heavily involved in the market, reflecting a sustained appetite for real estate opportunities," notes the report.

okood believes investment activities will continue if not strengthen in 2025 and beyond. Interest rate cuts, home equity accumulation, and housing shortages are some of the reasons for our belief. 

We want all who want to invest in real estate to do so confidently. Sure, it can be intimidating if you’ve never invested in real estate before; knowing this and knowing that real estate is the biggest wealth builder in the US, we are developing modern and practical tools for you to never be intimidated by real estate investing. 

A Complex Market Outlook

Despite the slowdown in transactions, investors continue to purchase more properties than they sell, adding to rental inventories but tightening the for-sale housing supply. This trend has significant implications for both renters and potential homeowners.

"Investor activity remains a double-edged sword for the housing market. It contributes to rental availability but also exacerbates the challenges of limited for-sale inventory," the report concludes.

Final Thoughts

While the housing market has cooled in some areas, investors remain a critical force. Their evolving strategies, particularly the shift towards smaller investors and the focus on emerging regions, signal continued adaptation to market dynamics. okood will empower you, the investor, to stay ahead of these trends by offering real-time market insights and data-driven tools. With okood, both seasoned and new investors will soon be able to identify emerging opportunities and refine their strategies for maximum impact in a changing market.